Identity Theft

The New Debt Collection Scam: Calling Your Mom

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Fraud-fighting organizations are reporting a new trend in debt-collection scams, in which fraudsters not only try to pressure people into forking over money they don’t owe but also harass targets’ family members and friends. Scammers rely on the social pressure and fear of job loss to get the victims to pay, according to a summary of consumer complaints to Fraud.org.

Many consumers don’t know their debt collection rights (here are the essential rights you need to know), which clearly state a debt collector is not allowed to disclose details of the debt to someone other than the debtor. Even in the cases of legitimate debts and rogue debt collectors using illegal practices to pressure consumers, people shouldn’t pay as a result of such collection attempts. Not only may it be a scam, it’s a violation of their rights.

This trend isn’t trivial: Scam victims suffered losses averaging $1,748.39 between October 2013 and June 2014, and these consumers are often in bad situations before fraudsters start pestering them. Scammers sometimes acquire a consumer’s home and work information from bogus payday loan applications, and if someone has been successfully duped before, fraudsters may try to sell their information to other aspiring criminals. These so-called sucker lists may subject victims to repeated fraud attempts, which is unpleasant enough without the added stress of harassing phone calls to others.

Anyone who has been a victim of debt-collection fraud should alert friends, family and co-workers so any debt-collection calls pertaining to that person are clearly identified as scam attempts. Most important: You should confirm the legitimacy of a collections account before paying (here are tips on the verification process), and never provide payment information to a debt collector over the phone. Fraud.org also warns against applying for payday loans online, due to the risk of exposing your personal information but also because online payday loans often carry higher fees and rates than loans acquired offline.

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  • Annoyed

    I have and continue to go through this….I get random calls and at first I actually thought I owed the money but then I go through my credit report and notice that it isn’t even listed there. So then I try to back trace what they told me. I felt like such a fool the first time. After that, they call again posing as someone else and then before you know it they are calling all over the place, including my husband’s ex wife! It not only is embarrassing but humiliating. Then it was that they spoke to my boss and that there is where I drew the line.

  • Chris

    I sympathize with anyone going through this torture and can offer a little advice that this article briefly outlines. Just remember a few key facts:

    - Keep detailed notes of any debt collection communication. Date, time, name of person who called you, how you felt, and what was said.

    - While a debt collector is legally obligated to inform you during your first phone call of their company name and that they are attempting to collect a debt, they often will not do this until after they have verified your identity (honest collectors do this so they don’t accidentally disclose who they are to the wrong person, which can, and often does, land them in legal hot water.)

    - You have the right to choose not to speak with them on the phone. Politely but firmly tell the collector that you only handle business matters through mail in writing, and then disconnect. If the first time they communicate with you is by phone, then they must legally send you a written notice within 5 days of the phone call. The notice will be a “dunning notice” or collection letter informing you of the amount owed and all that whatnot.

    - You have the right to limit their communication at any time. By default, they cannot call you at times or places known (or should be known) to be inconvenient to you. Be default, this is before 8:00am or after 9:00pm. You can send a letter to the collection agency (certified mail preferred) informing them that “All telephone calls are inconvenient.” This will prevent them from calling you again after they receive the letter. The law is also very specific about calls at your place of work. If you inform the collector verbally that you are not allowed to receive calls at work, they must stop immediately.

    - You have the right to dispute the debt. This is usually your secret weapon if you do not owe the debt. Do not ever admit to the debt over the phone (dishonest collectors will try to trick you into doing this.) If you send them a written notice within 30 days of their first communication with you (again, certified mail preferred) and inform them “I dispute this debt” then they must cease all collection efforts until they have obtained proof that you owe the money and mail it to you. If you don’t owe the debt, then they cannot validate their claim and they will go away.

    - A little something that many people don’t realize: debt collectors cannot use a computer or automatic dialing system to call your cell phone without your express consent. If you receive a call on your cell phone that has a long pause before a collector comes on the line, or a recorded message such as “please hold for the next representative” then you have been auto-dialed. It’s very unlikely that you gave the collection agency permission to do this before they called you for the first time. This is a violation of the TCPA (Telephone Consumer Protection Act). There is much precedent on this matter and courts have ruled plenty of times that this is a violation.

    - Finally, a debt collector is only allowed to contact friends/relatives/etc once, and only to obtain information to contact you. They cannot disclose that they are a debt collector or that you owe a debt – this is a serious (and often violated) law. Be sure to find out who they called, when, what time, what they said, etc.

    If any of the above rights have been violated, you have a superb defense against the collector. Look around for a Consumer Protection Attorney that works with FDCPA cases (Fair Debt Collection Practices Acts). If you have documented violations, any good CP attorney will take your case at no cost to you, as the law provides that the collection agency must pay your attorney fees if they lose. These laws are strict liability, so if you have proof (phone records, recordings, collection letters sent to you after you dispute the debt but before they sent proof) then it’s a slam dunk case. If they auto-dialed your cell phone, then make sure the attorney can handle an TCPA case as well – most of them do.

    The FDCPA provides up to $1,000 statutory damages, payable to you from the collection agency, for an action (whether it’s one violation or 10, it’s the same). The TCPA provides you with damages of up to $1,500 per phone call with no limit.

    In my experience, I had a collection agency come after me for a debt I did not owe. I disputed the debt with them and told them to stop calling. They continued calling anyway, and I found a consumer protection attorney who took the case in a heartbeat. Two months later, the collection agency settled the case by paying me statutory damages, attorney fees, and agreed to never attempt to collect the debt from me again along with a removal of the bogus-debt from my credit report (which they never reported anyway). The case never went to court, and with blatant violations 99% of violating collection agencies will settle the matter quickly. It’s rare for a case like this to actually go to court.

    Keep in mind that an honest collection agency will treat you fairly and will likely not intentionally violate. You should not “fish” for violations, but you should definitely know your rights and fight back if they are violated.

    Final Word: Dishonest (scum) collection agencies want you to believe they have some kind of authority. They don’t. They cannot have you arrested. They cannot garnish your wages (unless they sue you and win and get a court order for garnishment). Above all, and in summary, they cannot threaten any action that they cannot legally take or have no intention of taking. (As an example, they are not likely going to sue you over a $100 debt, so threatening a lawsuit is a violation of your rights in this case.) Do not be afraid of the collection agency, especially if you know you don’t owe the debt! And if you do owe the debt, an honest collector is going to work with you to get it repaid in a manner that’s feasible, doable for you, and fair to both sides.

    Best of luck to anyone going through this, and best wishes!
    -Chris

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